TaxTMI 
TaxTMI 
XYZ(Proprietor) is owning trucks / tempos which is given on hire to a Goods Transport Agency. Is XYZ required to pay service tax on the amount received from GTA? XYZ had received a Show Cause Notice for the past period on this issue. In my view XYZ is not required to pay service tax being exempted under Sr.No.22 of Notification No.25/20212 ST. Views of the experts please.
Service Tax on Truck owner
12 Dec 2021 
11 Replies 
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Service tax exemption for goods transport services may apply; owners must prove recipients were goods transport agencies to avoid tax.
The primary issue is whether amounts received by a proprietor for hiring trucks/tempos to an intermediary qualify for exemption under Sr. No. 22 of Notification No. 25/2012 ST when the intermediary is a Goods Transport Agency. The practical defense requires documentary proof that all service recipients were GTAs and that the transactions fit the exempt description; alternatively, examining hiring agreements for transfer of the right to use the vehicles may negate provision of taxable services. The claimant must substantiate the exemption with records when replying to Show Cause Notices. (AI Summary)
The primary issue is whether amounts received by a proprietor for hiring trucks/tempos to an intermediary qualify for exemption under Sr. No. 22 of Notification No. 25/2012 ST when the intermediary is a Goods Transport Agency. The practical defense requires documentary proof that all service recipients were GTAs and that the transactions fit the exempt description; alternatively, examining hiring agreements for transfer of the right to use the vehicles may negate provision of taxable services. The claimant must substantiate the exemption with records when replying to Show Cause Notices. (AI Summary)